July 2013

“Community Aging in Place”

As of this time, the “Capable” program is limited to the Baltimore area but it certainly could possibly influence other cities to consider creating a similar program for their senior community.

Here is the remainder of the article:

“While the program results are not yet available because it is ongoing, initial observations show success not just for those with many needs, but also those who just need assistance with one ADL.

“We have had surprising success with both sides of the spectrum,” says Sarah Szanton, Associate Professor at Johns Hopkins University School of Nursing and Principal Faculty with the Center for Innovative Care in Aging.”Some almost seemed too functional. They can take a walk, get out, cook; and we think we’re not really going to be able to do much. But we have had great success. [On the other hand], our first participant from CMS had difficulty in every single demand of self care. She went from limitations to all ADLs to not being limited in any of them.”

The cost savings are substantial: the $4,000 over four months that essentially allows a person to remain in his or her home compares with the national median monthly rate for assisted living care of $3,450 or more than $200 per day for nursing home care, according to Genworth Financial’s Annual Cost of Care Survey [1]. The researchers also note the cost is roughly equivalent to one third the cost of a hospitalization for an episode such as a fall or other injury.

The program is limited to Baltimore area currently, but a similar project is being rolled out in Michigan with the potential for more adopters across the nation. Private companies may also take a vested interest in the option, Szanton says.

“Commercial insurers for long term care want to keep people out of nursing homes,” she says. “You could imagine a model where they pay for it or provide lower premiums if someone has gone through the program.”

Under around $4 million in grant funding, Capable is expected to save $6.8 million over three years.”

Written by Elizabeth Ecker [2]

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How to Age in Place Comfortably

The city of Baltimore in Maryland created a project that they name “Capable” focusing  on the results of bundling service for the senior community and how that would impact their quality of life.

It’s a new program and as of this time, they don’t have any long term results to report but what they have noticed is there is an initial success to the idea, especially for seniors who need help with one “acts-of-daily-living.

I will post the article in two parts.

Project Shows Aging in Place Chances Strongly Improved Through Service Mix
Posted By Elizabeth Ecker On July 23, 2013 @ 6:36 pm In News,Reverse Mortgage | No Comments

“The early results of a Maryland based program indicate there are merits to bundling services to improve the experience and ability of seniors to age in their homes.

The savings count thousands so far, with dozens of seniors in the program currently reporting improved quality of life as well the state and federal government realizing savings through services delivered in the home.

But the mix of services is key, researchers behind the project say, including nursing care, occupational therapy and home improvement assistance, all delivered over a four-month period.

The Baltimore-based project, coined “Capable,” or Community Aging in Place – Advancing Better Living for Elders is modeled after a Philadelphia study, “ABLE,” that was tested in the early 2000s. Those who are 65 and older who qualify for the program by proving difficulty in at least one activity of daily living receive the services of the visiting nurse, occupational therapist and handyman over four months for a cost of about $4,000. About $1,100 of the spending goes to home improvements such as banisters, hand rails and lighting.

So far, 79 people have enrolled under current grant funding through the National Institutes of Health as well as a separate grant under health care reform through the Centers for Medicare and Medicaid Services.

The program is administered through the Center for Innovative Care and Aging at Johns Hopkins School of Nursing.”

Part 2 to follow.


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Seniors Can Have a Silver Mine

Here is the second half of the previous post, discussing why the current mortgage rates and gains in equity, can be a winning situation for a senior.

The third reason has to do with housing wealth—a significant asset for many households—since the impact of changes in interest rates on the payout from a reverse mortgage is partially offset by changes in the amount that can be borrowed.

High interest rates typically produce more income on investments, and vice versa, and they also directly influence the amount that can be borrowed against the home through a reverse mortgage.

At a real interest rate of zero, for example, someone could borrow 64% of the value of the house under the federal Home Equity Conversion Mortgage program. With a 4% interest rate, though, only 30% could be borrowed, as lenders look to prevent the loan plus accumulated interest from exceeding the proceeds from the home’s eventual sale.


Chart credit: Issue brief authors’ calculations

Low interest rates unfavorably impact the amount earned on annuities, but there’s a silver lining, the researchers say.

“The change in the portion of the value of the house that can be borrowed offsets the direct effect of interest rates on annuity income,” says the white paper. “For example, an interest rate of zero increases the share of household at risk by 1.4 percentage points, which is the net effect of a 2.7-percentage-point increase due to lower annuity rates and a 1.3-percentage-point decrease due to the ability to borrow more against the house.”

Read the issue brief [1].

Written by Alyssa Gerace [2]

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Seniors Can Have a Silver Lining

I am going to post an article in two parts that discusses why there is a potential silver lining for seniors due to a number of factors.  Although low interest rates have impacted savings and investments, they have created an excellent opportunity in mortgage rates.  Plus property values have increased by two figures.

The “Silver Lining”.

Reverse Mortgages a Silver Lining of Low Interest Rates for Seniors
Posted By Alyssa Gerace On June 19, 2013 @ 5:44 pm In Data,News,Reverse Mortgage | 1 Comment

The historically low interest rates stemming from federal economic recovery efforts negatively affect seniors’ annuity investments, but the impact on reverse mortgages presents a silver lining, suggests research recently published by the Boston College Center for Retirement Research (CRR).

While more than half of today’s households will not have enough retirement income to maintain their preretirement standard of living as of 2010, low interest rates are not necessarily to blame, the CRR finds in an issue brief [1] on the impact of interest rates on the national retirement risk index (NRRI).

“Households are less vulnerable than expected to today’s historically low interest rates, but higher interest rates would also provide no real cure to the problem of inadequate retirement saving,” the brief says.

A few factors explain the minor impact of low interest rates to senior households, including the muted effect interest rate changes have on annuity income.

“One’s initial thought might be that a doubling of interest rates would lead to a doubling of retirement income,” says the CRR. “But annuity payouts consist of a return of principal along with interest earnings. Since changes in interest rates only affect the interest portion of the annuity payout, the impact on the full annuity payout is much smaller.”

Another reason: financial assets for most households are only a “modest portion” of total wealth—only 10% for middle-income households aged 55-64.

Written by Alyssa Gerace

To be continued in the next post.


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